Here’s how and how much the IMF will finance Ukraine
The IMF has reached a preliminary agreement to finance Ukraine with 15.6 billion dollars over four years. All the details
The International Monetary Fund has announced that it has reached an initial agreement with Ukraine for a loan of 15.6 billion dollars over four years: they will help the country to support resistance to the Russian invasion, which has been going on for over a year.
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The agreement still needs to be ratified by the Fund's executive council – it should be discussed in the coming weeks – and takes into consideration Kiev's accession procedure to the European Union.
THE OBJECTIVES OF THE FINANCING, ACCORDING TO THE INTERNATIONAL MONETARY FUND
In a statement, Gavin Gray, an officer of the International Monetary Fund, said that "the overall objectives of the program […] are to support economic and financial stability in circumstances of exceptionally high uncertainty, restore debt sustainability and support the recovery of the Ukraine on the path to post-war EU membership”.
According to a Reuters source, the executive council of the International Monetary Fund has shown itself in favor of granting the loan: it would be the largest loan obtained by Ukraine since February 24, 2022, when Russia began the aggression.
RELEASE ADDITIONAL FUNDS
The International Monetary Fund said the deal should help unlock large-scale financing for Ukraine from international donors and partners, such as perhaps the World Bank. 15.6 billion is actually a low figure compared to Ukraine's needs: past calculations have estimated the cost of rebuilding the country in hundreds of billions of dollars.
THE FORECAST FOR THE UKRAINIAN ECONOMY IN 2023
Gray said that "a gradual economic recovery" of Ukraine is expected "in the coming quarters" of Ukraine thanks to the overcoming of some damage to critical infrastructure caused by the Russians, "even if headwinds persist, including the risk of further escalation of the conflict". .
The International Monetary Fund estimates that in 2023 Ukraine's gross domestic product could go from a 3 percent contraction to a 1 percent growth.
THE WORDS OF PRIME MINISTER SHMYHAL
Prime Minister of Ukraine Denys Shmyhal thanked the Fund for the support, saying that “in conditions of record budget deficits, this program will help us finance all critical expenditures, ensure macroeconomic stability and strengthen our interaction with other partners international".
THE US COMMENT
The United States – the main supporters of the International Monetary Fund and of the Ukrainian resistance -, through the mouth of Treasury Secretary Janet Yellen, declared that "an ambitious and adequately conditioned IMF program is essential to support Ukraine's reform efforts, also to strengthen good governance and address corruption risks, and to provide the necessary financial support”.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/fondo-monetario-internazionale-finanziamento-ucraina/ on Thu, 23 Mar 2023 05:28:04 +0000.